Shadegg giving funds back to PAC

Returns $10,000, denies wrongdoing

Robert Anglen The Arizona Republic Jan. 24, 2008 12:00 AM

After being accused of accepting illegal campaign donations, Republican U.S. Rep. John Shadegg said Wednesday that he was refunding $10,000 he received from his political-action committee, while insisting he did nothing wrong.

The move came just hours after the state Democratic Party filed a complaint with the Federal Election Commission, alleging that Shadegg used his PAC to skirt laws that limit the amount of money donors can give a candidate.

Shadegg, who dismissed the charge as political exploitation, said in a statement Wednesday that he welcomed the federal investigation and was giving back the money in order "to remain above reproach in the handling of my campaign finances and to dispel even the potential appearance of improper conduct relating to these funds."

Democrats pointed out that earlier this week, Shadegg was quoted in The Arizona Republic as saying he had no intention of giving back the money.

"It is a shame that it took an FEC complaint to force John Shadegg to return the illegal campaign donations," said Emily Bittner, Arizona Democratic Party spokeswoman. "The people of the 3rd Congressional District deserve a representative who is honest and straightforward with them all of the time, not just when he is caught red-handed."

Shadegg said he is confident that the FEC, which regulates election finances, will find that he did nothing wrong.

"In more than 14 years of living under our nation's campaign-finance laws, I have never been accused of violating these laws, much less been found to have done so," Shadegg said in his statement, adding, "I have also requested that the Federal Election Commission immediately, fully and fairly investigate the allegations made by the Arizona Democratic Party and resolve this issue as quickly as possible."

At issue is money that records show was transferred from Shadegg's political-action committee into his election campaign.

Two Valley businessmen who made the maximum allowable individual donations to Shadegg's campaign in 2007 also wrote additional $5,000 checks to Shadegg's PAC, Leadership for America's Future. Eleven days later, on June 26, the PAC wrote two $5,000 checks to Shadegg.

Normally, such a transfer would not be noticed among thousands of dollars in contributions. But in the same reporting period, Shadegg's PAC received no other contributions and paid out only the $10,000.

In its complaint, the Arizona Democratic Party said the transfer of money allowed the two donors to make contributions in the name of another, the PAC; that the timing of the donations suggested the contributors knew the PAC money would end up in Shadegg's re-election campaign; and that Shadegg's staff failed to investigate the "questionable" campaign donations.

"For the record, I once again reiterate that the individuals who contributed to my leadership PAC had no knowledge of, and were in no way involved in, the decision of my leadership PAC to contribute to my campaign the amount allowed by law," Shadegg said Wednesday. "It is unfortunate that some of the press coverage of this allegation has been out of proportion, enabling the exploitation of the allegation for political purposes."